Jet Maker Ready to Take Off on a Triple-Top Breakout

by Sam Collins | April 22, 2014 2:51 am

Jet Maker Ready to Take Off on a Triple-Top Breakout

Textron (TXT[1]) — This aerospace and industrial giant makes Cessna business jets, Bell helicopters and military equipment. According to S&P, improving economic growth worldwide bodes well for the business jet market. It sees operating earnings rising to $2.20 per share in 2014, from $1.75 in 2013, and it projects $2.55 in 2014. It has a 12-month price target of $44.

On Jan. 31[2], with the stock trading just under $36, I said, “Technically TXT is in a sharp intermediate uptrend with volume spikes on the upside and lower volume on declines.” I recommended traders buy it under $36.50 with a target of $42.

Then, on March 11[3], I said, “The stock reached a new 52-week high of $40.55 on [March 7], but it now appears to be rolling over into a minor correction. Buy TXT on a pullback to its 50-day moving average at $37 for a trade to $44.”

TXT fell to a low of $36.76 on April 15. Its reversal since back above the 50-day moving average, now at $38.50, along with a positive MACD, could provide enough momentum for a breakout from a triple-top at about $41. My trading target is raised to $46, and investors may want to buy TXT as a long-term hold in the aerospace sector.